If GDP is too low relative to potential GDP, which of the following is true?
A. Unemployment is higher than normal.
B. A recession has just begun.
C. Inflation is higher than normal.
D. Deflation will occur.
Answer: A
You might also like to view...
Starting from long-run equilibrium, an increase in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; higher C. lower; higher D. higher; potential
A minimum wage law that sets the minimum below the equilibrium wage rate will
a. create unemployment b. have no effect on employment c. increase employment d. raise the equilibrium wage rate e. lower the equilibrium wage rate
If a firm can maximize its profit by producing the output where price is equal to its marginal cost, the firm is operating in:
A. a perfectly competitive market. B. an oligopolistic market. C. a monopolistic market. D. a monopolistically competitive market.
The bank failures that occurred during the early years of the Great Depression:
A. hurt the government insurance funds since FDIC covered most of the losses of depositors. B. hurt large depositors the most since it was the large money center banks that failed. C. hurt small depositors the most since it was mainly small banks that failed. D. totaled about 30% of total bank customer deposits.